UK Services PMI Jumps Sharply from Sub-Par Level

The UK's S&P Global Services PMI for July beat expectations with a reading of 52.1, up from 48.8 in June.

This small beat against consensus is not expected to move markets significantly, as the flash estimate already set expectations and final prints rarely surprise.

The Bank of England watches the services sector closely for domestically generated inflation, and this rebound may influence rate expectations at the front of the gilt curve and sterling.

However, episodes where a services print jumps sharply from a sub-par level often partially reverse or flatten in the following release, so caution is warranted.